Last month was almost the worst month ever for bitcoin

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June 03 2021
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In the wake of May’s crypto crash, experts are now calling last month one of the worst months in the history of bitcoin.

Last month was almost the worst month ever for bitcoin

May 2021 represented the sixth worst month for returns in the brief history of the bitcoin market.

The world’s most well-known cryptocurrency ended the month with a 35 per cent drop in price – the worst monthly result for the bitcoin market since late 2018.

Another 4 per cent and it would have surpassed August 2011, which is currently the record-holder for bitcoin losses with an aggregate loss of 38.45 per cent.

Despite the dire headlines, Arcane Research managed to find a few reasons for crypto investors to remain optimistic.

While bitcoin itself has come out of May in rough shape, they noted that “the total value of the crypto market, excluding bitcoin, only dropped 13 per cent in May”.

“This is mainly due to the two first weeks of May, where altcoins were flying relative to bitcoin.”

“If bitcoin continues its consolidation over the next weeks, it’s not unlikely that altcoins can recover even more. However, as we have seen over the past few weeks, if the bitcoin sell-off continues, altcoins will be in trouble,” they said.

Arcane Research also noted that the level of activity on the bitcoin blockchain declined sharply in May, with the number of daily active addresses now at their lowest level since November 2020.

According to Monash University’s Dr Michael Duffy, “The recent falls in bitcoin are a reality check for investors and demonstrate the ongoing challenge for governments and regulators.”

“Legal regulation of digital currency as an investment product is beset by uncertainties, yet digital currencies come with considerable investment risk – given that they are not linked to underlying assets.

“Their value is based on confidence in the currency itself, ultimately as a means of exchange. That confidence can be highly variable.”

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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